Global Mints Report Record Silver Coin Sales For 2015

Gold coin sales register third best year since 2002, effectively a 30% increase over 2014.

Global investors snapped up a record 89.6 million one ounce silver coins in 2015, according to USAGOLD’s annual survey of global bullion coin sales. The strong 2015 showing follows an equally impressive 2014 for silver coins at 77.9 million ounces and 2013 at 85.4 million ounces. Year over year, silver bullion coin demand was up 14% from 2014. Last year was a banner year for gold bullion coin sales as well – the fifth best since 2002. National mints sold 2.75 million ounces in 2015 – an impressive 30% increase over 2014.

There was nothing to distinguish 2015 from previous years except that the price was right for both metals. Gold started the year at $1188 per ounce and ended it at $1061. Silver, the more volatile of the two metals, began the year at $15.73 per ounce and ended at $13.83. If nothing else, seasoned precious metals buyers – and that is the group that dominated the action in 2015 – like a bargain. Retirement investors are a large and consistent demand source, particularly for the U.S. Mint’s gold and silver American Eagle coinage.

As you can see from the charts, demand for both metals grew significantly after the 2008 financial crisis and never returned to pre-crisis levels. The persistent demand over the period indicates lingering concerns among investors about the economy and the potential for a similar crisis at some future date.

Past supply disruptions signal more of same for future

The US Mint reports sales for the silver Eagle would have been much higher in 2015 if it could have secured more coin planchets. Planchet manufacturers have consistently been unable to supply enough blanks to meet the extraordinary demand over the past several years. The mint suspended silver Eagle sales this past July when a sharp price decline generated huge demand among investors. It did not begin delivering wholesaler orders again until mid-August.

The US Mint has suspended wholesale allocations for one or both metals in 2009, 2011, 2013, 2014 and 2015. Since the 2008 crisis, there have been numerous stoppages at other national mints in the face of strong, unprecedented investor demand for both gold and silver bullion coins that depleted stocks. As a result, worries about potential supply disruptions consistently haunt the bullion coin market.

Bill Bonner, the long-time market analyst who founded the Agora publishing empire, recently warned investors about the potential for further disruptions:

“[T]here will be one important difference between the new super spike and what happened in 1980. Back then, you could buy gold at $100, $200, or $500 per ounce and enjoy the ride. In the new super spike, you may not be able to get any gold at all. You’ll be watching the price go up on TV but unable to buy any for yourself. Gold will be in such short supply that only the central banks, giant hedge funds, and billionaires will be able to get their hands on any. The mint and your local dealer will be sold out. That physical scarcity will make the price super spike even more extreme than in 1980. The time to buy gold is now, before the price spikes and before supplies dry up.”

The U.S. Mint reports continuing high levels of demand thus far in 2016 with mintage figures for both gold and silver bullion coins running well ahead of 2015’s pace.

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June issue: What’s behind gold’s recent sell-off? What is the real reason why central banks can’t get the economy moving and what does it for future gold demand? Is there a major run on London’s massive gold vaults and where did all the gold go? What do 17th century Dutch tulip bulbs have to do with your portfolio today (the nature of financial mania)? And more. _____________________________________________________________

Note about the charts: USAGOLD publishes these composite graphs of global gold and silver bullion coin sales annually from production figures published by the world’s leading national mints. As far as I know, the graphs are the only ones of their kind. We usually publish this report in late spring or early summer due to the reporting schedules of the various mints. Though the United States Mint publishes its mintage figures monthly at its website, others, like the Austrian and Royal Canadian mints, report annually and usually not until May or June of the following year. As a result, it is usually nearly mid-year before we get the complete picture and are able to pass it along.

I would like to thank our webmaster, Jen Dentry, for constructing the charts on bullion coin demand and coordinating data compilation with the various national mints. In turn, we would like to thank the national mints for working with us to make these charts possible.

Michael J. Kosares has over 40 years’ experience in the gold business. He is the founder and executive director of USAGOLD (both the website and gold brokerage service), the author of three books on the gold market, and the editor of "News, Commentary & Analysis," the firm's client letter. He has written numerous magazine and internet essays and is well-known for his ongoing commentary on the gold market and its economic, political and financial underpinnings. Visit his website at www.usagold.com.